ACCESSING ANGEL & VENTURE CAPITAL A PRESENTATION TO FROM February 19, 2009 Presented By: Jim Noble Regional Coordinator Northern Ontario Enterprise Gateway (705)

02/19/08Accessing Angel & Venture Capital2 NOEG – An Overview  Incorporated non-profit with a volunteer board.  Funding from FedNor.  Mission to stimulate the flow of capital (equity) investment and management expertise from northern investors into high-growth potential Northern Ontario companies.

02/19/08Accessing Angel & Venture Capital3 NOEG – Accomplishing the Mission.  Formation of local/regional angel investor networks.  Building links to other angel groups to increase investment capacity.  Help entrepreneurs prepare for investment – through our investor-ready programs.  Provide a process and link through which investor-ready entrepreneurs can access accredited investors.

02/19/08Accessing Angel & Venture Capital4 Angel/VC Investment Landscape Angels 48,000 Deals $22-$24B 2004 Investment In North America VCs 2,876 Deals $21B

02/19/08Accessing Angel & Venture Capital5 The Traditional Funding Landscape – Where Angels & VC’s fit HIGH Level of Investment Risk Assumed by Investor Seed Start-Up Early Growth Established Stage of Business LOW Founder/Friends/ Family Government. Angels VC’s M&A/Equity Markets Commercial Banks

02/19/08Accessing Angel & Venture Capital6 The Funding Landscape “After the Meltdown” HIGH Level of Investment Risk Assumed by Investor Seed Start-Up Early Growth Established Stage of Business LOW Founder/Friends/ Family Government. Angels VC’s (VC Ghost Town) M&A/Equity Markets Closed Commercial Banks More Risk Adverse The Funding Gap for Start-Up’s and Early-Growth Companies is widening

02/19/08Accessing Angel & Venture Capital7 Impact on Entrepreneurs oCash is king (cash-flow) oMust learn to bootstrap (do more with less) oValuations will be less oMust be sure investors have deep enough pockets to get across the “funding gap” oHarder to get funded

02/19/08Accessing Angel & Venture Capital8 Impact on Investors  Potential reduced investment capacity  Increased risk of dilution  Getting “stuck” with no exit  BUT – ANGELS ARE STILL INVESTING

02/19/08Accessing Angel & Venture Capital9 Angels & VC’s Compared & Contrasted AngelsV/C’s InvestmentInvest their own money + mentoring Invest other people’s money (institutions) Funded Amounts$100,000 to $1.5 million (syndicating trend today in order to make larger investments) +1.5 million +++

02/19/08Accessing Angel & Venture Capital10 Angels & VC’s Compared & Contrasted AngelsV/C’s Key reasons to invest Chemistry with management, detailed go-to- market strategy, rapid growth potential Operating history, experienced management team, can scale, sustainable competitive advantage Number of Investments each year Less than VC’s – have luxury of being selective More than angels, need to make a minimum number of investments in a given year

02/19/08Accessing Angel & Venture Capital11 Angels & VC’s Compared & Contrasted AngelsV/C’s TermsSomewhat negotiable Less negotiable Post-money Valuations Less than $3 Million $5 million and above

02/19/08Accessing Angel & Venture Capital12 Contact Me: Thank You and Questions Jim Noble, NOEG Regional Coordinator by telephone at , toll free or through our website at Thank you.